Today: Yahoo's (YHOO) annual revenues increase for the first time in four years as CEO Marissa Mayer seeks turnaround story. Also: Apple (AAPL) takes back title of most valuable company, VMware disappoints investors and announces layoffs, Zynga shoots higher.

Yahoo beats expectations for earnings while Mayer focuses on mobile

Yahoo's 2012 revenue increased from the previous year, the first time in four years the Sunnyvale company has managed that feat, according to an encouraging earnings report issued Monday that sets a solid baseline for CEO Marissa Mayer's attempts to resuscitate the ailing Internet company.

In the final three months of the year, Yahoo brought in profits of 32 cents a share, excluding certain items, on revenues of $1.3 billion, with both figures surpassing analyst estimates of 28 cents a share on $1.2 billion in revenues, according to Thomson Reuters. The company's stock rose 1.4 percent in late trading, after dipping 0.3 percent in regular trading to $20.31.

Yahoo's performance in the fourth quarter showed an interesting mix of advertising revenues, as search ads got a big boost and display ad revenues declined 3 percent.

"They underperformed significantly versus our expectations on display and overperformed on search," Pivotal Research Group analyst Brian Wieser told Bloomberg News.

Once the display ad leader, Yahoo has fallen behind Google (GOOG) and Facebook in that category as the two younger Web companies rise in stature and pageviews, and that pattern has continued under Mayer's leadership. However, Stadtler Capital Management president Kevin Stadtler, a Yahoo investor, told Bloomberg that Yahoo can improve in display advertising by leveraging its knowledge of users' preferences.

"They are really well-positioned because they can provide real-time data to advertisers, who can then pinpoint ads to people who are interested in their products. That's a really big deal," he said.

The headquarters of Yahoo Inc. is pictured in Sunnyvale, California in this file photo taken May 5, 2008. Yahoo Inc reported revenue of $1.35 billion in
The headquarters of Yahoo Inc. is pictured in Sunnyvale, California in this file photo taken May 5, 2008. Yahoo Inc reported revenue of $1.35 billion in the fourth quarter, up nearly 2 percent year-on-year. The Web portal said on Monday that its fourth-quarter net income was $272.3 million, or 23 cents per share, versus $295.6 million, or 24 cents per share in the year-ago period. REUTERS/Robert Galbraith/Files (ROBERT GALBRAITH)

Mayer's focus is fully on mobile, however, as the young CEO hopes to leverage Yahoo's properties on the most popular devices of the day with personalized content. The company needs a "chain reaction of growth," she said on Monday's conference call, which started this quarter with new mobile apps for Yahoo Mail and Flickr.

However, Mayer declined to tell investors how much Yahoo is currently earning on its mobile efforts, saying "Mobile monetization is new for everyone."

Where Yahoo is not shy is in efforts to spend a windfall from the sale of part of its stake in Chinese Internet giant Alibaba. Yahoo said Monday that it had purchased slightly less than $1.5 billion in stock with the proceeds from the sale, pushing the money back to shareholders in a move that will likely continue to push its stock price higher.

Even before any bump from Monday's report, Yahoo shares have hit highs not seen since 2008 thanks to a bump of about 30 percent since Mayer took over. With the report in hand, investors are likely to give her even more breathing room, some analysts said.

"As long as in the near-term things are not bad, I think the stock will generally act positively while we wait for Marissa Mayer to deliver," B. Riley Caris analyst Sameet Sinha told Reuters.

Apple rebounds, regains title of most valuable company in U.S.

Following two days of downfalls on Wall Street, Apple finally rebounded Monday, taking back the title of most valuable company in the United States.

Apple suffered on Wall Street at the end of last week following the announcement of record profits and revenues in the final three months of 2012, finally losing the title of most profitable company to Exxon, as Apple's market capitalization fell below $420 billion.

However, the company finally received a boost Monday, rising 2.3 percent to close at $449.83 while Exxon fell 0.6 percent, pushing Apple back to the top on the day it announced the arrival of a new version of its mobile operating system.

Apple isn't out of the woods, though, as its weakness could be the chance wireless carriers and components manufacturers have waited for to stop taking hits on their bottom lines in order to be affiliated with Apple, Reuters reported.

"The illogical love affair is over. Now it's just a great company," a former top executive for an Apple rival told Reuters. "The AT&Ts of the world will start to try to get themselves weaned off of paying such great subsidies to Apple."

VMware declines on disappointing guidance, layoffs planned

Monday's other major Silicon Valley earnings report came with a surprise, as Palo Alto software maker VMware announced that it would be cutting about 8 percent of its workforce in a restructuring, despite record revenues and profits in 2012. The company's outlook for 2013 was disappointing to investors, sending shares plummeting.

VMware announced that its annual revenues of $4.6 billion was a record for the company, as was its fourth-quarter revenues of $1.29 billion. However, in a separate filing with the Securities and Exchange Commission, VMware said it would lay off 900 employees in a restructuring that will take place through 2013. And the company's guidance for the year came in below analyst estimates, as the EMC subsidiary predicted revenues of $5.23 billion to $5.35 billion, lower than estimates of $5.42 billion.

After closing Monday with a 0.7 percent loss at $98.32, VMware plummeted more than 14 percent in late trading.

Wall Street dips, but tech stocks advance as Zynga explodes higher

Most of Wall Street declined Monday, as both the broad-based Standard & Poor's 500 and blue-chip Dow Jones indexes dipped. However, tech stocks managed a gain, with the Nasdaq increasing 0.2 percent and the SV150 index of Silicon Valley's largest tech companies rising 0.6 percent.

In regular trading, Zynga shares made a huge positive move, gaining 14.1 percent a week ahead of its earnings report on heavy volume, as action on social-gaming stocks heated up. Former Zynga partner Facebook gained 3 percent ahead if its earnings report later this week, and NetGear increased 1.8 percent after agreeing to purchase Sierra Wireless's AirCard business for roughly $145 million.

After hours, VMware wasn't the only Valley company to disappoint investors, as San Jose electronics company Sanmina missed estimates and fell in late trading.

Silicon Valley tech stocks

Up: Zynga, Workday, Jive, Facebook, Tesla, LinkedIn, Apple, Electronic Arts (ERTS), Nvidia, Splunk, Palo Alto Networks, Applied Materials, SolarCity, NetApp, Oracle (ORCL), Intel

Down: Netflix (NFLX), Juniper, SunPower (SPWRA), Symantec, Advanced Micro Devices, eBay (EBAY), VMware, Yelp, Gilead, Cisco (CSCO), Google

The tech-heavy Nasdaq composite index: Up 4.59, or 0.15 percent, to 3,154.30.

The blue chip Dow Jones industrial average: Down 14.05, or 0.10 percent, to 13,881.93.

And the widely watched Standard & Poor's 500 index: Down 2.78, or 0.18 percent, to 1,500.18

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, the Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.